15.06.2021, 09:43

CAAV asks Transport Ministry for consultancy over cargo airline project

CAAV asks Transport Ministry for consultancy over cargo airline project

A passenger aircraft is used to transport cargo. CAAV has asked the Ministry of Transport for consultancy over a proposal to establish the IPP Air Cargo airline - PHOTO: VNA

HCMC - The Civil Aviation Authority of Vietnam (CAAV) has written to the Ministry of Transport asking for consultancy over IPP Air Cargo JSC’s proposal to establish an airline specializing in cargo transport.

CAAV said that by the Investment Law, the IPP Air Cargo airline project is not included in the list of projects whose investment plans need to be approved by relevant agencies.

Besides, according to the Government’s Decree No. 89, IPP Air Cargo has to complete procedures for issuing a business certificate on air cargo transport.

In 2020, the prime minister agreed with the Ministry of Transport’s proposal that the establishment of new airlines will only be considered after 2022 when the aviation market recovers.

Therefore, to respond to IPP Air Cargo’s proposal, CAAV needs the Ministry of Transport’s directive on instructing IPP Air Cargo to prepare the necessary documents to request a business certificate on air cargo transport.

IPP Air Cargo JSC, whose chairman is well-known businessman Johnathan Hanh Nguyen, is an arm of Imex Pan Pacific—a retailer that makes up nearly 70% of Vietnam's luxury items market and a large shareholder of Southern Airports Services JSC and the Cam Ranh International Terminal Company.

IPP Air Cargo airline has a total investment of VND2.4 trillion, including 30% of IPP Air Cargo JSC’s equity and 70% mobilized. The airline will operate both in Vietnam and abroad.

IPP Air Cargo expects to transport some 115,000 tons of cargo and generate revenue of US$71 million in the first year of operation.

According to the plan, IPP Air Cargo will operate five planes in the first year of operation, seven plans in the second year, and 10 planes in the third year. It hopes to earn profits from the fourth year.

Vietnam has yet to have a cargo transport airline. Meanwhile, more than 80% of Vietnam’s imports and exports transported by air are done by foreign airlines.

In 2008, Trai Thien Air Cargo was granted a certificate to operate air cargo transport. However, the airline was nonoperational after that, and the certificate was retrieved in 2011.

Since the Covid-19 outbreak, many Vietnamese air carriers have used aircraft transporting passengers to transport cargo to earn more revenue.

In 2020, Vietnam Airlines used 12 Boeing 787 and Airbus A350 planes to transport cargo. The national flag carrier transported 196,000 tons of cargo last year, surging 54.3% compared with 2019.

Low-cost carrier Vietjet transported 60,000 tons of cargo in 2020, and its revenue from air cargo transport soared 75% year-on-year.